Economic Output Surges
In the third quarter of 2024, Nigeria’s economy experienced a growth rate of 3.46%, with the total output reaching ₦20.115 trillion, up from ₦18.285 trillion in Q2 2024. This growth was primarily fueled by the non-oil sector, according to the Central Bank of Nigeria’s (CBN) latest Economic Report.
Inflation and Monetary Policy
The report also noted a moderation in inflation during Q3, attributed to a decrease in the food component of the Consumer Price Index and the implementation of a restrictive monetary policy.
Oil Sector Developments
Domestic crude oil production saw an uptick due to enhanced security measures around oil infrastructure in the Niger Delta. Despite global price challenges, with Bonny Light crude dropping from US$86.92/b in Q2 to US$82.07/b in Q3, the oil sector still managed a year-on-year growth of 5.17%, contributing 0.28 percentage points to the overall growth.
Non-Oil Sector Performance
The non-oil sector accelerated to a 3.37% growth rate, contributing significantly with 3.18 percentage points to the total economic increase. Key drivers included finance, insurance, information, communication, crop production, trade, transportation, storage, and real estate.
Sectoral Growth Analysis
- Services Sector: The fastest-growing sector, it expanded by 5.19%, a notable increase from previous quarters, contributing 53.58% to the GDP. Within this, the finance and insurance sub-sector surged by 30.83%, partly due to banking recapitalization efforts and digital financial services growth.
- Agriculture Sector: Recorded a modest growth of 1.14%, supported by favorable weather conditions and increased harvests, although the fishing sub-sector contracted.
- Industry Sector: Grew by 2.18%, with mixed performances across sub-sectors. While oil production increased, other areas like mining and quarrying faced contractions, negatively affecting overall industrial growth.
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Government and Business Environment
The government’s efforts to improve the business environment, streamline processes, and enhance infrastructure quality were highlighted as significant contributors to this economic performance. The ongoing recapitalization of banks and investments in alternative energy sources for transportation also played crucial roles in sectoral growth.
Conclusion
Despite some headwinds, Nigeria’s economy showed resilience, with all major sectors contributing to growth, underpinned by strategic policy measures and sector-specific advancements.
